Description
For this assignment, you will create a harvest plan by describing in detail the reasons to start a new business after a failure, how you will execute the plan, and all the intricate parts of your plan. Follow the steps below to complete this assignment:
- Discuss in detail exit strategy(ies) and why they are appropriate.
- Be very specific in your details about the business that you would start if your original business where to fail.
- Present each and every element in your harvest plan. You may use diagrams and/or graphs to aid in the explanation of your harvest plan. (These visual aids will be especially helpful when you choose multiple harvest strategies – to show how the strategies work together. If you use any visual aids, be sure to provide descriptive details of the image below each of them).
- Keep in mind, some exit strategies are industry specific and some are more effective than others in different situations. Ensure your harvest plan can be executed in your industry.
Please view the attached instructions for this assignment which includes the page limit requirement. Also, the Extra Credit Powerpoint needs to accompany this assignment so pay close attention to its requirements.
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Explanation & Answer
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Running head: PLANNING FOR THE HARVEST
Planning for the Harvest
Institution
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PLANNING FOR THE HARVEST
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Planning for the Harvest
Introduction
Harvesting strategy is an important component of any business plan. It is the
termination of investment to derive maximum benefit when it is reasoned that further
investment will not be profitable. There are several reasons for harvesting a business, which
depend on the different aspects such as environmental issues to personal concerns. Personal
goals of the entrepreneur influence harvesting plan. Factors like retirement and the need to
create change when pursuing another business opportunity are some of the personal goals that
affect harvesting. In addition, financial reasons like performance level play a crucial role in
the harvesting plan. High performance is associated with higher harvesting success while
lower levels of performance mean reduced success. It usually advisable to harvest when the
business is performing well in terms of profits and sales revenues. The life cycle of the
business product is also a key factor to consider when creating the harvest plan.
Environmental issues to consider when developing the harvest plan are categorised into two:
macro and micro environmental factors. These factors influence harvesting strategy and have
diferent outcomes. The most common strategies that can be used to harvest from the business
include initial public offering, acquisition and liquidation.
Initial Public Offering
Initial public offering (IPO) is a common harvesting strategy in which a business sells
shares to the public. The decision to list shares means that the market will affect how shares
will be sold. Business owner and investors will lose direct control over the value for the
business and if this strategy is fruitful, the business will be left with a large amount of cash
PLANNING FOR THE HARVEST
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and equity. One of the benefits of IPO as harvesting strategy is that they have great potential
to create large capital within short a time...